Telomeres are structures on the ends of linear chromosomes that are required for genome stability. They serve at least two essential functions: (1) to counterbalance the loss of DNA from a chromosome end due to the inability of DNA polymerase to replicate chromosome ends completely, and (2) to identify a natural chromosome end as different from a broken chromosome end. Structurally, telomeres are complex, having a tandem repeat array at the extreme end that appears to be important for both of these functions, a more complex array of repeats of unknown function proximally, and proteins that bind to these DNA repeats. In Drosophila, the distal tandem array consists of repeats of a transposable element that resembles mammalian LINE elements and targets specifically chromosome ends. The more proximal, subtelomeric repeats in Drosophila and other species are thought to be associated with the formation of heterochromatin and the inactivation of genes placed in their vicinity, and may be instrumental in forming associations with other telomeres, the nuclear matrix and the lamina. Two experiments were designed to investigate telomere function. First the telomere-specific transposable element has been marked genetically will be returned to the genome in order to follow the transposition of a single element and to dissect the transposition mechanism genetically. Second, the subtelomeric repeats from one chromosome end (2L) have been ligated to a reporter gene and reintroduced into the genome to ask whether, and under what circumstances, this repeated sequence reduces gene activity. Transcription is reduced when the repeat is attached upstream to the reporter in one orientation, but not the other. Deletion of just a few of the 12 repeat units restores gene activity. Thus, this repeat array does reduce transcription and may be important for telomeric heterochromatin formation.